I put off getting my first credit card for a long time. In fact, it wasn’t until two years after graduating college that I finally sucked it up and got my first piece of plastic: The American Express Blue Cash Preferred®. What pushed me to open the card was the advice of a friend who explained that this was the best card for groceries and gas (two of my biggest expenses at the time). And he opened my eyes to the realization that I would make more money than paying with cash (it seems so obvious now)!
Needless to say, this card holds a special place in my
heart wallet, since it was my first. And there’s no card that I’ve swiped more frequently over the last few years.
But over time, my credit habits have changed significantly, particularly as I’ve learned more about how to intelligently manage and earn rewards. So I’ve been meaning to reassess whether this card is still a good fit for me. I finally sat down and took a look back at how much I’ve earned with the card, along with how much I’ve been using it in the last year, in order to decide if the card is still worth it and if I should keep it. I wanted to share the results for anyone else who is considering the card.
First, here are the basics of the card if you aren’t familiar (terms apply):
- Earn a limited-time welcome offer award of $300 when you spend $3,000 in the first six months
- Earn six percent back on up to $6,000 in purchases at US supermarkets (excludes warehouse clubs)
- Earn six percent back on select US streaming services
- Earn three percent back at US gas stations
- Earn three percent back on ground transit (like bus, train, ferry)
- Annual fee waived the first year, then $95
For many, many people, I imagine that this card makes A LOT of sense. Here’s why: According to the USDA, families of four using a “Low-Cost” grocery plan spend about $708 per month on groceries (per their January 2017 report). Your budget may be higher or lower, but this is a good point of reference. At that level of spending, you would earn $42 in cash back each month by using this card, with a maximum total of $360 per year on groceries.
That more than covers the annual fee each year once it kicks in, and when you stack this with coupons and other ways to cut your grocery bill, the savings will be tremendous. And, of course, we aren’t even factoring in gasoline, department store purchases, and the other perks.
Why I was Reconsidering
For a long time, this was my “go to” card for almost everything. But as I built out my portfolio, and my shopping habits changed, I began to use it less. Perhaps the biggest changes were that I started using other cards that earned 5 percent back on gas (as quarterly rotating bonuses) and that I began doing much more shopping at Costco, thereby reducing the amount of opportunities to earn six percent cash back since warehouse clubs don’t qualify.
I was still hopeful, though. After all, I live about one quarter of a mile from a traditional grocery store, where I still do a significant amount of shopping. And for many months in the year, the 3 percent on gas is still my best option.
Is it worth it? Here’s What I Discovered
I really just wanted to crunch the numbers on the card. The two main things I wanted to know was how much money I’ve made with the card in total cash back over the last three years and how much I’ve made in the last six months (to account for recent changes in spending behavior).
Here’s what I found–from November 2013 to January 2017 I have made $1,650 in cash back with this card! Wow, that surprised me! I’d post a screenshot of the total if I could, but it required digging into all my old statements and adding it up. This total includes the welcome offer I received, but it also includes one whole year of lower-tier earnings. For the first year, I actually had the free “EveryDay” version of the card, which only earned 3 percent on groceries and 2 percent on gas.
Is the Fee Worth It?
The most obvious question people ask about the card is if the annual fee is worth it. As I just said, I actually upgraded from the version without the fee to the version with the fee, so I think it’s worth it. But there’s a very easy way to tell. If you spend $61 or more each week at a traditional grocery store, then the Preferred version earns more cash back than the Everyday version (even accounting for the fee). So that might be one way to evaluate your decision. You can apply this logic when comparing the card to any other card that earns 3 percent back on groceries.
One other caveat is that at one point I put a substantial amount of work expenses on this card. It wasn’t ideal to earn 1 percent on those purchases (since I could have been meeting minimum spend or earning higher bonuses), but hindsight is 20/20, right? I bring it up only as an explanation for why the total is a little higher than you might expect from just groceries and gas.
Regardless, this was a very good sign that the card is profitable for me. But I also wanted to see how things were trending lately. And, luckily, I have made $130 from the card in the last six months.
As it turns out, the numbers look good and keeping the Blue Cash Preferred® definitely makes sense for me! Even 2017 is off to a decent start (though I’m still hoping to minimize what I earn at one percent).
At the end of the day I continue to be very happy with this card, and as someone who doesn’t travel a ton its cash-back earnings mean more to me than airline miles. I still have plenty of other spending in my budget for strategic use with other cards, or to meet welcome offer requirements. So the American Express Blue Cash Preferred® will continue to be an important staple in my wallet.
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